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Bitcoin ETF On The Horizon: SEC & Grayscale Engage In Pivotal Discussions

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The U.S. Securities and Exchange Commission (SEC) is engaged in discussions with Grayscale Investments regarding the company’s application to convert its trust product, GBTC, into a spot Bitcoin Exchange Traded Product (ETF). This development carries significant implications for the cryptocurrency industry, with hopes that SEC approval will pave the way for broader access to digital assets for everyday investors.

According to the report, Grayscale has been in contact with both the SEC’s Division of Trading and Markets and the Division of Corporation Finance following its recent court victory. The court ruled that the SEC had acted “arbitrarily and capriciously” in rejecting Grayscale’s ETF application, instructing the regulator to reconsider its decision. This legal victory has reignited the application process, allowing Grayscale to press forward.

Craig Salm, Grayscale’s Chief Legal Officer, expressed their focus on engaging constructively with the SEC. However, the details of these interactions remain confidential. Salm noted that other applicants for Bitcoin ETFs, including financial giants like BlackRock and Fidelity, are progressing in their discussions with the SEC, indicating positive momentum in the industry.

SEC Chair Gary Gensler refrained from disclosing the agency’s next steps as it awaits staff recommendations. In the meantime, Gensler emphasized the importance of the SEC’s Corporation-Finance arm in managing “rapidly evolving technology and business models,” a department central to Grayscale’s application.

Potential Window for Bitcoin ETF Approvals

Bloomberg ETF analysts James Seyffart and Eric Balchunas highlighted a potential window of opportunity for the SEC to approve various spot Bitcoin ETF filings, including Grayscale’s GBTC conversion, in the days leading up to November 17. They noted that this window could result from the SEC extending the deadline for several pending ETF filings, with November 8 marking the last day for comments.

However, Seyffart emphasized that the approval of a spot Bitcoin ETF is not guaranteed. Still, he and Balchunas predict a 90% likelihood of approval by January 10 next year, highlighting the potential significance of this development for the cryptocurrency industry. The crypto community eagerly awaits further updates as these discussions progress. The SEC declined to comment on the ongoing negotiations.

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Bitcoin ETFs Anticipate Record Weekly Inflows Amid Regulatory Turmoil

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In a dynamic turn of events, institutional investment avenues have experienced a remarkable surge in activity, aligning with Bitcoin’s current valuation at $34,209. This surge coincides with a growing wave of anticipation regarding potential regulatory shifts in the United States. Citing credible sources like Bloomberg, it’s revealed that Bitcoin exchange-traded funds (ETFs) are on the brink of achieving unprecedented weekly capital inflows.

The speculation that the U.S. might soon greenlight a Bitcoin spot price-based ETF has not only influenced BTC’s price movement but has also had a positive ripple effect across the surrounding ecosystem. This surge in demand extends beyond exchanges and mining firms, reaching even the beleaguered institutional investment options.

According to Eric Balchunas, a senior ETF analyst at Bloomberg, at least two well-known entities experienced a significant trading volume during the week ending on Oct. 27. One of them was the ProShares Bitcoin Strategy ETF (BITO), which became the first futures-based ETF to receive approval in the U.S. in 2021.

In this recent update, Balchunas highlighted that $BITO saw a trading volume of $1.7 billion last week, its second-highest since its debut. He also noted that Grayscale Bitcoin Trust (GBTC) traded $800 million, reducing its discount to the Bitcoin spot price to a two-year low. Balchunas concluded that with $2.5 billion in less conventional exposure methods, there’s a discernible audience.

A Testament To Bitcoin ETF Momentum

This surge in ETF trading activity hasn’t gone unnoticed. William Clemente, the co-founder of crypto research firm Reflexivity, remarked that ETF trading is now “back in full steam.” Remarkably, GBTC has made a striking resurgence in recent months, even preceding the 15% gain in BTC/USD observed last week.

Recent legal victories on the arduous path toward converting GBTC into a spot ETF have provided the necessary impetus. Grayscale’s product now trades with an implied share price that is only 13.1% below the BTC spot price, according to data from monitoring resource CoinGlass. This is the narrowest discount observed since November 2021, a time when Bitcoin itself was at its all-time high.

Mister Crypto, a prominent figure in the Bitcoin and altcoin trading community, noted, “The GBTC discount keeps narrowing,” Interestingly, ARK Invest, an investment management firm, has chosen a different path, reducing its GBTC holdings alongside the rise in share price. Nevertheless, ARK is forging ahead with its plan to introduce a dedicated Bitcoin spot ETF. It’s worth noting that GBTC presently forms 10.24% of ARK’s Next Generation Internet ETF, a notable shift from the landscape in November 2022.

Grayscale’s Bitcoin ETF Quest: Court Drops Mandate

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The legal conflict between Grayscale and the SEC has concluded with the D.C. Circuit Court of Appeals issuing a final ruling. This ruling forces the U.S. regulator to reverse its denial of Grayscale’s spot bitcoin ETF application. Notably, the court had criticized the SEC’s rejection of converting the AUM’s substantial $17 billion Grayscale Bitcoin Trust [GBTC] into an ETF as “arbitrary and capricious.” Interestingly, the securities watchdog opted not to challenge the court’s decision, as reported by TronWeekly.

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Grayscale's Bitcoin ETF Quest: Court Drops Mandate 2

The recent conclusion of the case on October 23 essentially cemented the previous verdict, shifting the attention back to the SEC. Now, the SEC has the authority to either approve Grayscale’s application or potentially decline it based on different grounds. The regulator’s decision not to contest the ruling elicited responses from experts in the market.

ETF analyst James Seyffart from Bloomberg viewed the SEC’s move as a significant advancement in the approval process for crypto-based ETFs. Similarly, other industry experts such as Michaël van de Poppe and Crypto Rover shared this perspective, indicating that the SEC’s decision not to challenge Grayscale’s victory suggests a positive outlook for the cryptocurrency market. Poppe observed the development of an institutional framework for cryptocurrency investments, while Crypto Rover pointed out that the SEC might lack a basis to reject Bitcoin Spot ETFs.

Grayscale: “Ready To Work With SEC”

It is important to note that the regulatory body is simultaneously evaluating multiple other spot bitcoin ETF applications, some of which are submitted by major industry heavyweights such as BlackRock, Fidelity, Franklin Templeton, or Cathie-Wood-led Ark Invest.

Following the recent court ruling, Grayscale’s spokesperson, Jennifer Rosenthal, expressed their eagerness to collaborate further with the SEC to facilitate the conversion of GBTC into an ETF. Rosenthal stated in a statement made on October 23 that the Grayscale team is looking forward to continuing their constructive work with the SEC. She emphasized that GBTC is fully prepared operationally, and the team aims to move forward with the process as swiftly as possible, all for the benefit of their investors.

BlackRock’s Bitcoin ETF Move: Market Erupts In Joy As BTC Touches $35,000

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BlackRock, the world’s largest asset manager, has taken a bold step towards launching a Bitcoin Exchange-Traded Fund (ETF). The company’s iShares Bitcoin Trust has recently made an appearance on the Depository Trust and Clearing Corporation (DTCC) website, as reported by The Wolf Of All Streets, author of The Wolf Den Newsletter.

This financial market giant processes trillions of dollars in daily transactions. The ticker IBTC identifies the trust, and this listing marks the first proposed spot Bitcoin ETF on DTCC.

This development comes on the heels of BlackRock’s October 18 amendment to its initial Bitcoin ETF proposal. Legal experts and analysts have taken particular note of this amendment, which introduced a CUSIP—a unique identifier necessary for North American securities. 

Additionally, the filing mentioned the intention to purchase seed creation baskets for the ETF in October, subject to specific conditions. It indicates BlackRock’s active involvement in acquiring BTC, even if in relatively modest quantities.

BlackRock’s foray into the Bitcoin ETF realm reflects a broader trend within the financial sector. Other investment firms, such as Ark Invest and 21Shares, have also recently updated their Bitcoin ETF applications. Notably, Ark Invest’s amendments followed discussions with the U.S. Securities and Exchange Commission (SEC), implying ongoing regulatory conversations.

Grayscale, a cryptocurrency investment firm, is also advancing towards the ETF space. They have registered shares of their existing Bitcoin Trust under the Securities Act of 1933, with an eye on converting it into an ETF in the future. These collective efforts underscore growing optimism that Bitcoin ETF approval may be on the horizon, with BlackRock’s involvement seen as particularly bullish.

These developments unfold against a backdrop of significant legal strides. The DC Circuit Court recently criticized the SEC’s rejection of Grayscale’s ETF conversion as “arbitrary and capricious,” fueling expectations of a more favorable regulatory environment.

Bitcoin’s Impressive Gain

The cryptocurrency market has responded favorably to these developments. BTC’s price surged on Monday, briefly crossing the $35,000 mark for the first time since May 2022. The sudden uptick in BTC’s value witnessed a substantial gain in the past 24 hours, soaring from $31,000 to over $34,000. Currently, the cryptocurrency is trading at $34,523.49, reflecting an impressive 11.86% daily increase and an impressive 22.37% gain in the weekly chart.

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However, the enthusiasm surrounding BlackRock’s involvement and the potential for Bitcoin ETF approval is driving positive sentiment within the cryptocurrency community, hinting at a brighter future for digital assets in traditional finance.

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Bitcoin ETF Frenzy: Google Searches Skyrocket

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The anticipation for the approval of spot Bitcoin ETFs by the US SEC has reached a fever pitch, as evidenced by a surge in Google searches related to this topic. In the past week, Google searches for spot Bitcoin ETFs hit an all-time high as the crypto community eagerly awaited the green light from the regulatory body, expected to come in early 2024. The data, analyzed over a five-year period, revealed that retail investors in the United States are particularly interested in utilizing BTC through potential spot ETFs.

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Bitcoin ETF Frenzy: Google Searches Skyrocket 5

According to Google data, the search phrase “bitcoin ETF” reached a value of 39, the highest since ProShares’ futures-based ETF was introduced two years ago. This surge in interest indicates a growing curiosity among mainstream individuals about these investment funds and their potential impact on the market capitalization of Bitcoin, which is already the world’s largest cryptocurrency. Historically, a search value of 100 has coincided with bull market tops in BTC and Solana.

The recent trend suggests a positive shift in the adoption of cryptocurrencies as more people seek information about these innovative investment options. The market’s optimism has been further fueled by the SEC’s failure to meet the deadline to appeal a court ruling related to Grayscale’s Bitcoin Trust (GBTC) conversion to an ETF. This situation has bolstered confidence that spot ETF approval is imminent in early 2024.

Ark Invest Modify Bitcoin ETF Application

Additionally, prominent asset management firms such as BlackRock and Ark Invest are actively competing for top positions in ETF approval. Ark Invest, led by Cathie Wood, has made strategic modifications to its applications, including agreements with Coinbase that emphasize the segregation of the trust’s assets from the custodian. The SEC had previously raised concerns about spot Bitcoin ETF applications lacking robust surveillance-sharing agreements.

These encouraging developments have not only led to a surge in Bitcoin’s price to touch $30k briefly but have also spiked the age consumption metric, indicating the movement of previously dormant BTC to different wallets. A recent analysis by Santiment highlighted that this scale of movement has not been observed since July 27, suggesting renewed interest among traders and revitalization in overall network activity.

Matrixport Report Foresees Bitcoin Price Surge To $56k with BlackRock ETF Approval

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Matrixport Research has released a report predicting the potential impact of the BlackRock Bitcoin ETF, highlighting a conservative estimate of BTC reaching $42,000 upon approval, with the possibility of soaring to $56,000 if $50 billion in funds flow in.

Entitled “Bitcoin ETF Approval Sets Stage for Massive $24-50 bn Fiat Rush,” the report follows Matrixport’s bold 2023 outlook, which foresaw a significant crypto rally driven by factors like reduced US inflation and favorable macroeconomic conditions. Not only did it anticipate robust rebounds for BTC and Ethereum, but it also foresaw a notable drop in volatility.

The report draws attention to the remarkable performance of GBTC (Grayscale Investments’ Bitcoin Trust), which surged by an impressive 167% year-to-date, outperforming BTC’s 71% growth. The turning point occurred when BlackRock announced its ETF application on June 15, 2023.

Matrixport’s earlier reports had analyzed the vast potential of the 15,000-strong US registered investor advisor (RIA) community overseeing approximately $5 trillion. A modest 1% allocation recommendation for BTC from this group could bring about a substantial $50 billion influx. 

Drawing parallels with precious metals ETFs, which have a market cap of around $120 billion, and assuming a 10-20% shift from precious metal ETFs to Bitcoin ETFs, we could witness inflows ranging from $12-24 billion.

The BlackRock Bitcoin ETF’s potential approval could significantly impact the market. A $24 billion increase in Tether’s market cap, acting as a proxy for ETF inflows, would push BTC’s price to $42,000. With an even larger influx of $50 billion from RIAs, BTC’s price could rally to $56,000.

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Analysts’ Insights On Bitcoin’s ETF Frenzy

In contrast to the excitement generated by a false spot Bitcoin ETF approval report, analysts warn that the real approval’s impact might be less dramatic. The low recent volatility in BTC’s price suggests that much of the excitement surrounding the ETF approval is already factored into the price. Analysts expect the ETF’s impact to be realized over an extended period rather than an immediate surge in capital inflows.

Enigma Securities pointed out the significance of the spot Bitcoin ETF, with many market participants eagerly awaiting its approval. Still, they caution that it could lead to a “sell the news” event, with BTC’s price initially spiking before experiencing a decline. It underlines the importance of cautious evaluation as the cryptocurrency market eagerly awaits the potential BlackRock Bitcoin ETF approval.

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Bitcoin ETF Approval Could Catapult Crypto Market by $1 Trillion

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The potential approval of Bitcoin spot exchange-traded funds (Bitcoin ETFs) has taken center stage in the cryptocurrency world, with data analytics firm CryptoQuant making a compelling case for the transformative impact this development could have on the market. According to their recent report, Bitcoin could burgeon into a staggering $900 billion asset, and the entire cryptocurrency market could witness a growth of $1 trillion.

The evolution of institutional adoption in the cryptocurrency space has been a pivotal narrative. In 2020-2021, institutions primarily focused on adding Bitcoin to their balance sheets. However, CryptoQuant suggests that the next wave of adoption might see financial institutions offering clients direct access to Bitcoin through spot Bitcoin ETFs, fundamentally altering the landscape.

What makes the potential inflow from spot Bitcoin ETFs particularly noteworthy is its scale. In comparison to the influx of capital into the Grayscale Bitcoin Trust (GBTC) during the last bull market cycle, the magnitude of potential investment is staggering. With the largest cryptocurrency fund in the world, GBTC, currently managing $16.7 billion in assets, the emergence of spot ETFs could potentially dwarf this figure.

CryptoQuant’s report posits that if issuers allocate just 1% of their Assets Under Management (AUM) to Bitcoin ETFs, approximately $155 billion could pour into the Bitcoin market. This amounts to nearly one-third of Bitcoin’s current market capitalization and, if realized, could theoretically propel Bitcoin’s price to a range of $50,000 to $73,000.

Bitcoin ETF’s Historical Bull Trend

A historical perspective reveals an intriguing trend in Bitcoin’s behavior during bull markets. Market capitalization has grown 3-5 times more than its realized capitalization, suggesting that for every $1 of fresh investment, Bitcoin’s market capitalization could increase by $3 to $5, as posited by CryptoQuant.

The recent speculative frenzy in response to a false report on a spot Bitcoin ETF approval demonstrated the market’s readiness for such a development. According to Markus Thielen, the head of research and strategy at Matrixport, this enthusiastic response has the potential to keep bearish sentiment at bay for a significant period.

Additionally, the ongoing narrowing of the GBTC discount, reaching its lowest point in nearly two years, underscores the bullish sentiment in the market and the growing anticipation of Bitcoin spot ETFs.

In conclusion, the approval of Bitcoin spot ETFs could usher in a new era of institutional investment and market growth. If CryptoQuant’s predictions hold true, Bitcoin and the broader cryptocurrency market could witness substantial gains, ultimately solidifying their position in the global financial landscape.

Bitcoin ETF: Explosive Surge as GBTC’s Discount Shrinks to 15.87%

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The Bitcoin ETF’s rise has led to a narrowing discount for Grayscale Bitcoin Trust (GBTC). As of October 13, GBTC’s discount to Bitcoin’s net asset value (NAV) stands at 15.87%, drawing attention from investors and analysts. Some believe this reflects the market’s anticipation of SEC approval for spot Bitcoin ETFs.

The discount to NAV is a key metric, signaling how far a mutual fund or ETF is trading below its actual net asset value. In this case, GBTC’s discount began to decrease significantly when financial giants like BlackRock filed applications for spot Bitcoin ETFs back in June. From a steep 44% on June 15, the discount had already fallen to 26.7% by July 5, and this trend has persisted ever since.

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GBTC’s Discount to NAV chart over the last 12 months.

This narrowing discount is reminiscent of the situation in December 2021 when Bitcoin was soaring to its all-time high of $69,000. According to CoinGecko, GBTC’s discount was at a similar level then. It suggests that the market may be pricing in the possibility of spot Bitcoin ETF approval by year’s end.

SEC’s Grayscale Decision Fuels Bitcoin ETF Confidence

Oliver Velez, a prominent Bitcoin advocate, shares this sentiment and believes that the market is actively factoring in the SEC’s approval. On the other hand, cryptocurrency investor Lyle Pratt expects GBTC’s discount to continue dwindling in the coming weeks as spot Bitcoin ETFs draw closer to regulatory approval.

Recent reports have indicated that the SEC is unlikely to appeal the Grayscale decision made on October 13. This development has prompted Bloomberg ETF analyst James Seyffart to assert that spot Bitcoin ETF approvals now appear to be a “done deal.” Grayscale itself confirmed on October 15 that the SEC’s 45-day period to seek a rehearing had elapsed, signaling that the court would soon issue its “final mandate.”

Grayscale is ready to convert GBTC into an ETF upon SEC approval, and they eagerly await the green light to proceed. In light of these developments, the prospect of spot Bitcoin ETFs in the United States is drawing closer to becoming a reality, and the narrowing discount on GBTC could be a testament to the growing optimism among investors regarding this pivotal development in the cryptocurrency market.

Bitcoin’s $28k Leap As Dormant Forces Drive Market Momentum

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In a week marked by significant market fluctuations, Bitcoin [BTC] has surged past the $27,000 mark, registering a 4% gain in the daily index. This sudden upswing has been attributed to a notable spike in the age consumption metric, a measure indicating the movement of previously dormant BTC to different wallets. According to Santiment, the scale of this movement has not been witnessed since July 27, suggesting a renewed interest among traders and an overall revitalization in network activity.

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Bitcoin's $28k Leap As Dormant Forces Drive Market Momentum 9

Market analysts are interpreting this surge in dormant BTC activity as a potential precursor to a significant price uptick in the Bitcoin market. Such patterns have historically signaled positive developments for the digital asset. However, the crucial question remains: can this momentum be sustained?

Interestingly, the last time BTC experienced a substantial rebound was on October 12, coinciding with the release of the Consumer Price Index [CPI] data. The report revealed a 0.4% increase in household inflation for September, representing a notable 0.2% drop from the 0.6% recorded in August 2023. This decline in CPI has been interpreted by investors as a bullish indicator, sparking optimism in the market.

The CPI data published monthly serves as a pivotal economic indicator, offering valuable insights into inflation trends and predicting potential shifts in citizens’ investment behaviors in the months ahead. A decrease in pressure on disposable income often translates into more funds available for investment in risky assets like stocks and cryptocurrencies, making the current market conditions favorable for such investments.

Bitcoin: SEC Miss Appeal Deadline

The recent price movement in Bitcoin also coincides with another significant development: the US Securities and Exchange Commission [SEC] missed its deadline to appeal a court ruling related to Grayscale’s Bitcoin Trust [GBTC] conversion to an Exchange-Traded Fund [ETF]. Per a Reuters report, this move suggests a potential inclination on the SEC’s part to accept the court’s decision and approve the conversion of GBTC to an ETF.

As the market watches these developments unfold, investors remain cautiously optimistic, closely monitoring Bitcoin’s performance and regulatory decisions that could significantly impact the cryptocurrency landscape in the near future.

Signals Hope For Bitcoin Spot ETFs: SEC’s Decision Not To Appeal Favors Grayscale

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The United States Securities and Exchange Commission (SEC) has reportedly chosen not to appeal a recent court decision that favored Grayscale Investments. This decision has implications for the cryptocurrency market, particularly with regard to spot Bitcoin exchange-traded fund (ETF) applications.

The ruling in question mandates that the SEC review Grayscale’s application to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF. The court’s decision came from the U.S. Court of Appeals for the District of Columbia Circuit.

According to Bloomberg analyst James Seyffart, the SEC’s decision not to appeal the ruling signifies a significant step in the approval process for cryptocurrency-based ETFs. Seyffart also stated that the SEC is expected to commence discussions with Grayscale in the coming week, and a new response from the SEC could be anticipated within the next two weeks.

Seyffart further predicts that there is a high likelihood of a spot Bitcoin ETF being approved, potentially by January 2024. He also mentioned that this decision could pave the way for other cryptocurrency-related ETFs.

Bitcoin Analyst Predictions & Insights

Other experts in the field, like Michaël van de Poppe and Crypto Rover, echoed the sentiment that the SEC’s choice not to appeal Grayscale’s win suggests a positive outlook for the cryptocurrency market. Poppe noted that the institutional framework for cryptocurrency investment is being designed, and Crypto Rover stated that the SEC might not have a basis to reject any Bitcoin Spot ETFs.

Several spot Bitcoin ETF applications are currently awaiting the SEC’s decision. The final deadline for the initial application from ARK Invest, led by Cathie Wood, is set for January 10, 2024. There is optimism in the industry that if the SEC approves one ETF, it may pave the way for the approval of others.

Overall, the decision by the SEC not to appeal the Grayscale case is seen as a positive signal for the cryptocurrency market, with analysts predicting the potential introduction of Bitcoin Spot ETFs in the near future, potentially even before January 2024. However, this development could mark a significant step in legitimizing cryptocurrency investments for institutional and retail investors alike.

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